Whether we can continue to get the journalism we need, given the declining revenues and funding in journalism, is a concern of many people around the world, including in Hong Kong. To what extent is it possible to have independent journalism under such economic conditions? Before we get there, let’s ask first, what does it mean for journalism to be “independent”? What exactly should it be independent of?

Journalism is often at its best when it can “speak truth to power”, when journalists can ask the questions nobody else wants to ask, or even speak out against the powers-that-be when nobody else has the courage to do so. It is why it is important to think about how journalism is funded, who pays the bill and who subsequently can exert pressure on editors and journalists. For example, newspapers rely on advertisers (57%) more so than circulation (36%) for their revenues (Pew, 2015). That means it is important for newspapers to keep advertisers happy. It also means that these advertisers can exert disproportional pressure and influence: this is a problem if we agree that journalism is not only a business, but also serves a larger, indeed a public function to society. It is a lesson Hong Kong learned the hard way when House News, an online news outlet, closed down in 2014 because several major advertisers pulled out because of political pressure (SCMP, 2014). In the words of Tsoi, the founder of House News:

“Despite our popularity, many big companies don’t place advertisements on our website because of our critical stance towards the government and Beijing”.

So how can we have “independent” journalism and what kind of funding would this require? We need to start thinking about what I call models of “decentralized funding” for journalism. “Centralized funding” is when your funding comes from only a few, and subsequently, powerful and influential sources. In contrast, “decentralized funding” is when funding comes from many small amounts provided by multiple funders, or indeed, citizens. If all these small amounts add up to something significant, then that creates a situation where no particular source is powerful enough to exert meaningful influence, and where journalism can be more or less “independent”. But is that possible? Here are a few examples of journalism that rely on “decentralized funding”. This is not meant to be an exhaustive list, nor do I claim these are entirely new phenomena; that said, new technologies have given rise to several interesting ideas and opportunities worth exploring.

Crowdfunding: websites like Kickstarter, Indiegogo and Fringebacker are online platforms that enable a project to raise funds from a large number of people. Recent cases of journalism funded this way in Hong Kong include Factwire and Hong Kong Free Press. Patreon is another example of a crowdfunding platform, but instead of a one-time fundraising effort to jumpstart a project (like Factwire and HK Free Press) it instead allows people to be a “patron”; that’s to say, to financially support an individual or project on a regular basis.

Subscription: traditional subscription still exists, even online. For example, Malaysiakini, an online news website in, you guessed it, Malaysia, receives significant funding from its many subscribers who are willing to pay a sum every month. People are willing to subscribe, and pay money, because whereas the traditional media in Malaysia are highly censored, the online media are still relatively free and open: the internet is where they can get actual news. Malaysia’s situation is a bit peculiar like that: thanks to a pledge it made in 1998 in an attempt to attract foreign investment, the government will not censor the internet (Open Net).

Micro-payment: for the longest time, micro-payment was seen as the holy grail that would save quality journalism. While this has yet to happen, and I am not sure if it ever will, that doesn’t mean there are no interesting changes in this domain: in China, several platforms now allow users to “tip” content they like. For example, WeChat allows its users to tip writers for posts they like.

Centralized, but independent: Last but not least, independent journalism does not necessarily require “decentralized funding” to exist. Traditionally, foundations have always played an important role in funding important works of journalism. A recent example is ProPublica, funded by the Sandler Foundation, whose aim is to do quality investigative journalism. That said, many places around the world do not have the necessary foundations that have an explicit mission to serve the public interest, including in Hong Kong, a society that is already relatively well-off (I’ve never seen so many luxury cars than here in Hong Kong).

It is paramount that we start thinking and experimenting with models of “decentralized funding” for journalism; so that we can continue to get the journalism we need. If you know of any examples of decentralized funding that I should learn more about, I’d love to hear about them!

We’re in trouble. The future of the internet is in danger, and if that danger comes to pass, it’s both unhealthy for and a very bad indicator of the health of our democracy.

Congress is already very close to passing companion bills to censor the internet, the Stop Online Piracy Act (SOPA, H.R. 3261) and the Protect IP Act (PIPA, S. 968). This is in addition to the domain name seizures already underway by Immigrations and Customs Enforcement (ICE).

All of these efforts are terrible ideas. Their supporters don’t understand or care about the internet and are happily willing to break the internet to appease the content industry. It is among the very worst contemporary examples of a government that is of, by, and for special interests, and if it passes, it will be a slap in the face of democracy, free expression, due process, and technological innovation. To top it all? It won’t even do much to stop online infringement.

Fortunately, there may be signs that things are turning our way. I’ll get to that further below.

EFF has a great summary of the several ways SOPA can lead to a site getting shut down. Section 102 deals with foreign sites and is the most all-encompassing, but 103 and 104 are actually easier for rights holders to (mis)use, and they apply to domestic as well as foreign sites, so I’ll start there.

Section 103 allows IP rights holders to go directly to a website’s payment processors and advertisers—and to demand that these third parties cease all business with the website operator. These payment processors and advertisers then have just five days to act. The website operator has the right to file a counter-notice that they are not substantially dedicated to infringement, but (a) they may not get the chance until after the payment processors and advertisers have already cut off payments, and (b) the third parties have no obligation to take the counter-notice as final and re-establish a business relationship.

Section 104 takes this “default=censorship” strategy even further. Everyone in the internet ecosystem—registrars, web hosts, advertisers, financial processors, search engines, etc. etc.—gets near-categorical federal and state immunity for any decision to terminate a business relationship with a site (or even to shutter a site) “in the reasonable belief” that the site is dedicated to infringement. Under Section 103, a rights holder must at least file a claim. Under Section 104, even the intimation that a site is infringing might be enough to get it shut down—and the site would have no legal recourse.

The Administration also gets in on the fun in Section 102, which gives the Attorney General the power to use government-mandated Domain Name System (DNS) filtering to stop Americans from accessing “foreign infringing sites.” A domain name, such as Google.com, is an easy-to-remember way to tell one’s computer to go to a specific numeric address (e.g., 74.125.39.147). It is this number (the IP address) that identifies that site’s server (the computer that hosts the website). Everyone enters the domain name into their browser’s internet address bar, but the numbers would take one to the same site. Click on the numbers above or paste them into your browser to see for yourself.

Under Section 102, if a site were found to be primarily dedicated to infringement, the government could “seize” the site’s domain name. More precisely, the domain name registrar—a company that keeps track of which domain names are attached to which servers—would, if US-based, be compelled to stop sending users to the correct server. All domestic ISPs would also be forbidden to take you to the right server (the number behind the name), and advertisers and banks would be forbidden from doing business with these companies.

If the government found a foreign site to be infringing under these bills, the government would try to make it disappear for US audiences.

If this bill becomes law, we will see the shuttering and/or financial starvation of thousands of websites—which are, of course, a form of speech and/or press. They would be silenced and/or starved based on either an affidavit by a rights holder, a mere suspicion by a business partner, or (at best!) a one-sided court hearing with a low burden of proof. Little wonder then that legal scholars from (my friend and) rising star Marvin Amorri to the legendary constitutional scholar Laurence H. Tribe (pdf) have concluded that the bills are unconstitutional threats to the First Amendment.

By now it should be clear that, if passed into law, SOPA or PIPA would have devastating consequences for innocent actors who are mistakenly identified. The web seizures undertaken by U.S. Immigrations and Customs Enforcement (ICE), beginning in 2010, illustrate this peril all too well. Several websites have been taken down for posting media files that were authorized and even actively shared by the copyright holders or their representatives. Others have apparently been seized merely for linking to allegedly infringing content.

One in particular, DaJaz1.com, has become the cause célèbre of the anti-domain-seizures movement. It was one of a cluster of hip hop websites seized last year. Major voices from Vibe to Kanye to P. Diddy were actively promoting the sites, hardly a sign that they are dedicated to copyright infringement.

Last week, the feds finally gave up on DaJaz1. TechDirt (which has nearly gone all-SOPA, all-the-time) had the headline:

Imagine if the US government, with no notice or warning, raided a small but popular magazine’s offices over a Thanksgiving weekend, seized the company’s printing presses, and told the world that the magazine was a criminal enterprise with a giant banner on their building. Then imagine that it never arrested anyone, never let a trial happen, and filed everything about the case under seal, not even letting the magazine’s lawyers talk to the judge presiding over the case. And it continued to deny any due process at all for over a year, before finally just handing everything back to the magazine and pretending nothing happened. I expect most people would be outraged. I expect that nearly all of you would say that’s a classic case of prior restraint, a massive First Amendment violation, and exactly the kind of thing that does not, or should not, happen in the United States.

They go on to detail how DaJaz1’s owners were stonewalled, blockaded, and never allowed their day in court by the feds—for over a year—while the feds managed to arrange a court process during which all court proceedings (including several granting extensions that DaJaz1’s owners should have been able to contest) were secret and all the filings were sealed and not open to the site owners.

Once the details of the accusations came out, it turned out that the allegedly infringing songs were given directly to the blog by copyright holders’ agents in the hopes of promoting the music. The RIAA was the source of the original complaint, and one of the songs in question was not even released by an RIAA label.

Another operation using similar methods but for a different goal—seizing sites with child pornography—mistakenly took down 84,000 sites in one shot, resulting in each of those thousands of sites being down for 3 days. Even worse, each domain was redirected to an ICE notice that the website had been seized for trafficking in child pornography. Nearly all of those sites were not dedicated to child pornography, and to my knowledge, ICE never even apologized to them for the error.

Further, it takes little imagination to picture a devastating chill on legitimate sites that make fair uses of copyrighted content. If I run a news and commentary site, I may be less likely to include portions of copyrighted works, even if such inclusion is very likely fair use and crucially relevant to my discussion of the matters at hand.

In particular, media criticism sites would be in grave peril; how long after the bill’s passage would it be before partisan news outlets started using the new law to silence their critics? How long before FoxNews goes after Media Matters for America? Think that’s far fetched? Witness Righthaven’s efforts to sue bloggers for using even brief quotations. And what was on the list of threats they used to scare people into paying licensing fees? Domain seizure. Among other things, these bills would give a hunting license for those who would like to shutter the sites of upstarts, competitors, and critics.

At least these bills will stop piracy, right? Hardly.

Dedicated infringers will still find infringing sites—especially foreign sites that host infringing files with impunity. Remember, the feds are seizing the site name (e.g., Google.com) but not the number behind it (74.125.39.147). All you need is a small program to tell your computer to go to the right number—and, because the bill will forbid your ISP from getting you there, a proxy server in the middle. The same strategies have already proven successful for dissidents behind government firewalls, who still manage to upload and download forbidden information—despite far more active, on-the-fly, and resource-intensive censorship schemes.

You might think that at least payment processors and advertiser networks would be scared off of dealing with these sites. If it were that easy—if we could target the banks and advertisers that support internet scofflaws—then spam and other internet evils would have long since been wiped out.

The internet breeds decentralized innovation, and innovators will spring into action to help users circumvent ISP and search engine filters as well. This software will also be considered grounds for legal action—with the goal being to ban the tools, as the 1998 DMCA bans DRM-hacking devices. That’s worked so poorly that multiple free circumvention tools are available for most major DRM systems. There are so many DVD rippers that LifeHacker has a post comparing rippers to help you choose the best.

As if all of the above failures and offenses were not enough, these bills would harm our economy and reduce our competitiveness in the internet age. If SOPA were law when YouTube was getting started, the site probably would have been shuttered. The next YouTube will be much less likely to be born in the US if it can be kicked out of the legitimate portion of the web before it has really grown up. The EFF warns that sites like Etsy, Flickr, and Vimeo would be in danger.

Internet innovation is one of the few bright spots in the economy, and major internet firms have warned that this will increase the cost of regulatory compliance and decrease our competitiveness. Venture capitalists have also warned that SOPA would substantially decrease their willingness to invest in US technology start-ups. Union Square Ventures, just down the street here in NYC, even put this link saying the same thing on their homepage.

Senator Ron Wyden (D-OR) has placed a hold on PROTECT-IP, and he has even vowed to filibuster the bill should it come to the Senate floor. Because of this principled opposition and his long record of standing up for internet freedom, I made a donation to Sen. Wyden’s re-election campaign—even though my wife and I are watching every dollar as we save to buy our first home.

So these bills are terrrrrible, but they enjoy a lot of support in the House and Senate—30 cosponsors in the House, and a whopping 40 in the Senate. This post is derived from an email I sent to my Senators and Representative, and all three wrote back with disappointing notes to the effect of, “Yeah, but we gotta stop internet infringement.” Surely this is unrelated to the content industries having spent far, far more money on lobbying and campaign donations than their opponents on this issue.

Which brings us back to democracy.

In response to these bills, we have seen the swelling of a major internet movement—nearly the groundswell we saw around network neutrality in 2006. Opponents created a campaign declaring November 16—the day of a hearing in the House that was heavily stacked in favor of SOPA—as “American Censorship Day,” a campaign that went viral in a major way. Over 6,000 sites including Wikipedia, Creative Commons, Mozilla (including the default start page in Firefox), Reddit, TechDirt, and BoingBoing, directed traffic to a single action site, AmericanCensorship.org. At the time, the site said that it had generated over 1,000,000 emails and four calls per second to Congress. To date, AmericanCensorship.org has earned over 650,000 Facebook likes and 63,000 tweets.

If Wyden’s hold and the opposition can stop this fast-moving train(wreck), then perhaps democratic values and majority opinion can actually shape the future of the internet. Just maybe, a public outcry can stop a terrible idea backed by special interests.

If not, we may be in big trouble—and not just because the internet will be broken.

Relatively few people had read the article, “The Cranky Redskins Fan’s Guide to Dan Snyder,” written by Dave McKenna and published on November 19, 2010. It’s a local, alternative weekly paper with circulation of maybe 100,000 on a good week. I love football commentary in general and mockery of Dan Snyder in particular, and even had I picked up the paper or found the link at the time, I would have skimmed it at best.

Now, everybody’s reading it. Judging by the slow load times, I’d venture to say the paper’s website is getting orders of magnitude more traffic than it’s designed for. I read the full article in detail, as well as the publisher’s eloquent response to the lawsuit. I have long since adopted Gregg Easterbrook’s derisive moniker for the meddling football owner, “Chainsaw” Dan Snyder, and even I had no idea how many truly scummy things Snyder has done. Now I have the man’s entire list of foibles in one centralized location. Thanks, Chainsaw Dan!

Snyder clearly has no idea how the media works in general and how the internet works in particular. This is a fantastic example of the Streisand Effect. Snyder wanted the article to go away; instead, he’s helped bring national attention, ensuring that millions more know about his shameful past behavior.

In addition to accusations based on the article itself, the suit also includes as a basis for action the photograph accompanying the article–an ordinary photo of Snyder, defaced with ballpoint pen-style sketching of bushy eyebrows, a mustache, a pointed goatee, and horns. The style is much like one might find on a subway billboard or in a high school yearbook. As part of the allegation of defamation, the suit claims that this photo is “a blatantly anti-Semitic” depiction of Mr. Snyder, “precisely the type of imagery used historically, including in Nazi Germany, to dehumanize and vilify the Jewish people and associate them with a litany of libels over the last 2,000 years” (p. 6).

Snyder has hit Godwin’s Law at a record pace. The paper specifically addresses the accusation of antisemitism here. Many of the paper’s employees are Jewish, “including staffers who edited the story and designed the cover,” and they certainly didn’t intend or see the drawing as antisemitic.

Also, I find the allegation in the context of this particular legal filing to be deeply troubling. There is no basis in law for suing somebody for deriding a public figure’s religion. We could debate the merits of this until the cows come home, but it’s a policy decision our society has made, and lawsuits have to be structured by current law. Thus, including an allegation of religious intolerance is more than irrelevant; it’s willfully incendiary. The goal is presumably to get the court and the public to hold a prejudicial opinion of the defendants before the matter is even heard before the court.

This lawsuit shows that “Chainsaw” Dan Snyder is even worse at managing his public image and understanding the First Amendment than he is at running an NFL franchise. Which is really saying something.

P.S. Here’s an awesome, heartfelt thank you to Snyder from Washington Post writer Gene Weingarten—a lifelong New York Giants fan. To whit:

I know you are taking some criticism today from carping media types. They seem to think that you are not only behaving like a petty, vindictive bully but also that you are being strategically stupid – by bringing a vast new audience to a three-month-old, otherwise-obscure alternative-media piece, which can be found here.

In attempting to build a vibrant community-of-interest, every political blog faces a policy choice of sorts: what kind of commentary will we allow. Some of the basics are easy to sketch out and universally applicable. Disagreement is good, but flame wars are bad. Don’t engage in ad hominem attacks. The site owner/moderators reserve the right to take away posting privileges if you are obviously just there to antagonize the community. The low transaction costs of the internet make it very easy for a hostile liberal or conservative to jump onto the comment boards of their ideological opponents and start acting obnoxious. Whether this ideological diversity is supported when polite is an open question. There aren’t a lot of Republicans on DailyKos or Democrats on RedState, but that could either be because they get banned or because they eventually get bored and give up.

A trickier policy choice can perhaps be summarized as “how do we deal with our own crazies.” On either end of the political spectrum, there exist a tiny minority of tinfoil hat-wearers. The most radical offline leftists set fire to auto dealerships and ski resorts. The most radical offline conservatives start militias and shoot up churches. Online, how are we to distinguish them, and what are we to do about them?

Conveniently, online crazies tend to grab hold of a popular conspiracy theory and not let go. On the left, these are the “9/11 Truthers” and, post-2004, the “Ohio Fixed Election” folks. On the right, we have the “Obama birth certificate” fanatics.

I raise this because I’ve started to think recently that Markos Moulitsas made a particularly important policy decision in the early days of DailyKos. Wanna see how fast you can banned from DailyKos? Post a 9/11 conspiracy diary. Same with the 2004 election conspiracy theory. Kos took a hard line on this talk and said that it would have no place on his site. You want to help build a progressive majority? Welcome to dKos. You want to talk about statistically variations between exit polls and final results, or the spookiness of Diebold? Banned.

The conservative blogosphere is currently experiencing a surge in traffic, as online conservatives have something more to complain about than all the liberals on tv (this supports a deeper theoretical argument about “political opportunity structures” and innovative campaign technologies, but I don’t want to give away the ENTIRE dissertation on this blog…). From what I can tell, they haven’t drawn the same policy stance (I haven’t conducted a large-scale content analysis yet, so feel free to correct me in the comments). Want to claim that Obama is a foreign-born Manchurian candidate? Welcome! Gateway Pundit, in particular, has soared up the conservative rankings in the past few months, all while exhibiting a type of borderline hysteria that cannot be too attractive to mainstream conservatives (you may not like Obama’s tax proposal, but that doesn’t make him Mao or Stalin).

My hunch is that this policy choice serves as sort of a path dependent critical juncture in the development of online political communities. When a new visitor drops by the site, what is the tenor of the conversation like? DailyKos has made a series of policy choices in support of their goal of being a “reality-based community.” Whether you like them or not, the tenor of the conversation bears little resemblance to the caricature presented by Bill O’Reilley, and a reasonable argument for why dKos has gotten so large is because Kos chose to lop off the most extreme-left commenters, making the tenor of the conversation better reflect the preferences and opinions of the much larger population of less-extreme, but less outspoken, progressives. Which conservative community blogs will take a similar policy stance, and how will it play out in the development of online conservativism? Anybody have a good guess or two?

In a blog post over at The Publius Project, Judith Donath asks “Is Reputation Obsolete.” It’s a provocative piece and well worth a read. Honestly, I’ve spent the past week trying to dip into the literature on reputation systems and to call it the shallow end of the pool would be an insult to pools. It’s shocking how little attention has been done on the topic, and Donath raises a lot of interesting points about the ill-fit between present day reputation systems and the total availability of online information.

It seems to me that her post could be best rephrased as “Is Reputation Tracking Obsolete?” In that case, the answer would be a clear and definitive yes.

Reputation in its purest form is deep, contextualized, complex, and local. I have a very different reputation with my colleagues in the Sierra Club than I do with other academics, and still another one with my drinking buddies. All of those reputations are linked to different dimensions of my identity, and each is accurate in its own way. They accrue over time, and they are exceedingly difficult to scale up from local context to general form.

Online, reputational data is put at a premium, because the purer the anonymity, the worse people are bound to act. I haven’t seen any studies on this yet (I’ll get around to doing one someday, I suppose), but it’s pretty clear that when you require people to login before posting comments to a blog, they self-moderate a bit more, and when you add a Mojo system like they have at SlashDot and DailyKos, and “superuser” status contingent on high Mojo ratings, people behave better still. That’s standard “Shadow of the Future” stuff, a basic finding from game theory, and replicated in a host of experimental settings. So reputation systems incentivize good behavior while distributing the costs of punishing bad behavior. As a basic example, consider how costly eBay would be if they had to provide top-down monitoring of all transactions. Actually, you don’t need to bother considering it: without reputation tracking, there would be no eBay. Period.

So is reputation obsolete? Yes and no. The thing we need to recognize is that when you divorce reputation assessments from their local, complex, and contextualized settings, you have to rely on rough proxies to fill in the gap. Those proxies are not, themselves, reputation. When an eBay buyer ranks the seller, that tells us relatively little about the seller. When a DailyKos user contributes to a diarist’s “tip jar,” that functions as a “thumbs up.” But real reputation isn’t the aggregate of online clapping and booing. And as more diverse information becomes available online, the simplicity of aggregating clapping and booing seems like a coarse and outdated tool for measuring reputation.

I would suggest that the quality of reputation tracking is always going to hinge on three elements:

(1)relevance of the proxy data. How good of an approximation does the online rating mechanism provide?

(2)Traffic levels. I’m always entertained by low-traffic blogs that include recommended diary structures and such. Online reputation tracking assumes huge inputs, but given the power law distributions of web traffic, we know that there are only going to be a select few webspaces that obtain that level of traffic.

(3)Gaming of the system or lack thereof. This last one is long-term problematic. Any high-traffic webspace is going to represent valuable online real estate. The perverse incentives are there for actors to try to figure out the rules of the game and then innovate ways to get around them. We haven’t seen a lot of innovations in reputations systems for years, and most of the literature seems to be focused solely on eBay. So reputation tracking systems are probably obsolete at this point, simply because every system is going to have weaknesses and vulnerabilities, and there haven’t been many new developments (at least that I’m aware of — which is a decent indicator that if something great is out there, it sure hasn’t diffused very widely yet).

What we really need is reputation systems that take advantage of Metcalfe’s Law. As processing speed and memory continue to double — as Information Abundance becomes still more abundant — we need to develop reputation tracking systems that use better proxies. Donath asks whether “in a world where all action is recorded, is there still need for reputational information?” I would respond, “Yes, all the moreso!” If we broadly understand reputation data as a form of filtering and content management, we have little choice but to rely on reputation assessments, but we also need them to evolve along with the rest of the web. In a world where all action is recorded, reputational information is all the more necessary so we can sort through the mess. But likewise, as more types of data become available, we need to diversify the types of proxies we use for assessing reputation. This will be particularly true as the mobile web comes into wider use, rendering whole new classes of data available.

The real challenge lies in figuring out how to sort and use that data, particularly keeping in mind the competing needs for reputational assessment/filtering and privacy. The weaker the privacy norms, the stronger the reputation tracking can be. I don’t think I particularly want my academic or Sierra Club colleagues to know my reputation among my drinking buddies, though (or vice versa, for that matter!). The tradeoff has steeply decreasing returns at some point, and there’s an important role for public scholars like Donath in helping to identify what that point might be.

This is actually a reasonable next step for blogging as it becomes a major media outlet and big business. It’s little different than Errors & Omissions insurance for other professionals, including media producers such as filmmakers.

In Comcast’s new Terms of Service, the company explicitly admits that it degrades peer-to-peer traffic as a means of reducing their network load.

The company also admits that they will kick off end users who use (what they determine to be) too much bandwidth:

The Service is for personal and non-commercial residential use only. Therefore, Comcast reserves the right to suspend or terminate Service accounts where bandwidth consumption is not characteristic of a typical residential user of the Service as determined by the company in its sole discretion.

Robert Reich’s latest book, Supercapitalism, is a fantastic analysis of the current relationship between corporations, citizens, and politics.

I put Supercapitalism on my wish list after Prof. Lawrence Lessig’s glowing recommendation. While I make no pretense of being such a gifted writer as either of these scholars, here I attempt to summarize the book and follow with a few minor points.

Reich, the former Labor Secretary and current Professor of Public Policy at Berkeley, describes us all as being of two minds. On one hand, we are all consumers and (most of us are also) investors. As such, we’re always seeking to minimize our costs and maximize our profits. This leads to lower costs and higher profits; companies that cannot deliver lose customers and investors.

On the other hand, we are also all citizens and employees. In that capacity, we are generally frustrated by the effects of our growing collective power as consumers and investors. Those low prices and high profits squeeze employees, main street family-run stores, and the environment.

Our civic selves object to these negative effects, but we know that our individual purchasing and investing power cannot reverse these trends. Even were we to make the sacrifices of paying higher prices and earning lower returns by supporting more “socially responsible” businesses, we cannot make a difference with our dollars alone. Even social movements calling for corporate responsibility fail because, even if the companies comply, they leave an economic vacuum to be filled by other companies; otherwise, companies just revert to their old ways once the heat is off.

In the “Not Quite Golden Age” of postwar America, companies could pay high wages and CEOs could act on what they saw as the public interest. Most major industries were composed of cozy oligopolies with little product variation. The high cost of industrial production set high barriers to entry, leaving companies with plenty of room to negotiate relatively good deals for employees and the public.

Thanks in large part to new information technologies, as well as the growth of worldwide shipping infrastructure, we have entered what Reich calls supercapitalism over the past 30 years. Companies can design a product on a computer in Denver, buy parts from Brazil, Egypt, and Hungary, and subcontract with a factory in Korea to follow the computerized assembly instructions.

The increasingly fierce competition between companies has led to the squeezing along every part of the supply chain. Main Street retailers can’t sell refrigerators for $1200 when the same icebox is $799 at the big box store 2 miles away. Ford can’t stay profitable by paying its workers $70 per hour in salary and benefits when comparably skilled Koreans will do the same job for half. Suppliers get squeezed, too; ask any of WalMart’s suppliers about this process.

In the era of supercapitalism, companies have little choice but to minimize prices and maximize profits. In the Not Quite Golden Age, a system of cozy oligopolies gave consumers and investors little choice; both groups had mediocre but predictable deals all around. Now, consumers and investors who do not get the best possible deals will take their money elsewhere. Companies that do not ruthlessly squeeze their costs go bankrupt or get bought out.

This process has also led to the corruption of the democratic process. In the ever-accelerating contest for strategic advantage within and between industries, companies have begun to game the system to a degree that was generally not necessary 30 to 50 years ago. Reich’s own experience in government illustrates the impact of the rapid influx of money into the DC area:

Even by the mid-1970s, when I worked there as a political appointee at the Federal Trade Commission, much of the downtown was still run-down. I’d take any lobbyist who insisted on a lunch to a cockroach-infested sandwich shop on the other side of Pennsylvania Avenue, after which I would never see the lobbyist again. But when I returned to Washington in the 1990s, the town had been transformed. … The flow of money had inflated everything in its path. (p. 132)

Corporations are the primary folks funding this influx of capital. NGOs and labor make just a drop in this rapidly growing bucket of lobbyists, PR firms, campaign donations, “expert” consultants, hotels, and fancy restaurants with leather menus and $75 steaks.

Corporations spend this cash in the search for competitive advantages within or between industries. They may not even want to play, but they have to in an attempt to counterbalance other companies’ or industries’ efforts. Competition for customers and investors is too fierce, and one bill can kill a company’s bottom line.

The result is the increasingly impenetrable Beltway we all know and love. Corporate cash has purchased such a cacophany that citizens’ voices are drowned out.

Reich does offer some hope for a cure. Some of the usual suspects are here, from policy changes such as stronger labor protections to procedural reforms such as publicly funded campaigns. The really interesting recommendations, though, center on Reich’s argument against the anthropomorphic view of corporations as people.

Corporations are nothing more than bundles of contracts, so he insists we should neither give them standing to sue to overturn duly enacted laws nor find them criminally liable nor tax their income as though it is the company that owes. Their shareholders and employees would still retain all their rights and responsibilities, which is proper, since a corporation is just a collection of shareholders and employees.

He makes a compelling case for the feasibility and benefits of taxing shareholders instead of companies; corporations would withhold taxes on shareholders’ behalf and give them something like a W-2 form at the end of the year. This would be feasible in the era of computer-processed financial transactions, and it would be progressive, since the wealthiest would pay a higher rate on this income. It would also eliminate corporate inefficiencies caused by some wrinkles in the tax code.

The jaded may initially blow these off as politically impossible (I certainly did), but Reich points out that most companies would rather not be shaken down. A coalition of likeminded corporations helped leverage McCain-Feingold into law, and combined with public pressure, a similar coalition could create even greater reforms.

The prospect for procedural reform in particular is not impossible, but it is quite optimistic. A few industries with a history of winning backdoor negotiations with little effective opposition would fight tooth-and-nail against anything that would reduce their unique power position: oil, telecom, and the entertainment industry all come to mind.

For instance, he perpetuates the mistaken notion that the net neutrality debate was just another contest between corporate interests. In fact, tech companies were seriously outmatched on The Hill, and it was only due to the outstanding work by NGOs such as Free Press and the mobilization of over 1 million citizens that Sen. Ted Stevens’ (R-AK) 2006 telecom bill died as a net neutrality hostage.

Additionally, Reich regrettably fails to consider the potentially obstructionist role of the corporate media in blocking political reforms. The media have an obvious economic incentive to keep campaign funding the way it is: teeming with corporate cash that winds up buying tons of ads for several months every two years.

Any attempt to tie campaigns’ spending to taxpayers’ willingness to pay would generate substantial media opposition, and a bill mandating free airtime would drive media companies to break out every political tool they have. Congress speaks to its constituents through the media; these same media will turn on them (even if not as overtly as, say, Fox) in a heartbeat, and politicians know that.

Finally, Supercapitalism could better integrate theory generally and political economy more specifically. This is ironic; the book is itself an excellent introduction to political economic analysis. But theories about the flow of political information (such as Oscar Gandy’s theory of information subsidies) and the policymaking process (perhaps Baumgartner and Jones’ theory of punctuated equilibriums) could add some heft to Reich’s analysis. This is clearly a trade press book, but it is not impossible to drag a little theory into a book with wide appeal. Paul Krugman’s highly readable book, The Age of Diminished Expectations, is a fine example, and he was using economic theory.

All told, though, Reich’s book is nothing less than a beacon of hope in a world of dark political realities. This should be on your must-read list, and I’m already thinking about how I could use it in the classroom.